When it comes to nuclear safety and Ukraine’s energy independence, a cost-cutting Russian company might not be the best choice for new nuclear reactors.
But a Russian-owned firm based in the Czech Republic, Škoda JS, could start building two new reactors at the Khmelnitskiy nuclear power plant, some 300 kilometers west of Kyiv.
If completed, the reactors would double the plant’s electricity output. But investigative reporters are raising questions and concerns over the legality and safety of the proposed project.
Journalists with Schemes, RFE/RL’s investigative program, revealed on Jan. 24 that Škoda JS had already been chosen for the project, valued at more than Hr 70 billion, or at least $2.5 billion.
Russian-owned Škoda JS “was chosen for this without an open tender” the investigative journalists have reported, despite there being other options, such as companies from Korea, the U.S. and France.
Škoda JS is a subsidiary of Netherlands-registered OMZ BV, which appears to be a front for the Russian company United Machine Building Plant, in turn owned by Russia’s state-owned Gazprombank. Russian energy giant Gazprom and its related company structures hold a majority stake in Gazprombank.
Ukraine has put sanctions on Gazprombank, but not Škoda JS, although the latter Czech-based company is reportedly under U.S. and European sanctions.
Bosses at the Khmelnitsky nuclear power plant explained to reporters that Škoda JS was mainly chosen on the basis of low cost, adding that the company was significantly cheaper than other potential suppliers, such as Korean manufacturers or U.S.-based energy company Westinghouse.
While it’s not immediately clear if the state-owned power plant is in breach of Ukrainian, European Union or U.S. sanctions by doing business with Škoda JS, it’s likely to attract some difficult questions related to the legality of such dealings.
There are also questions as to whether the deal is in the national interest of Ukraine or if it raises national security concerns, given that Russia and Ukraine are entering their fifth year of war which has featured threats to Ukraine’s energy infrastructure, and an ongoing struggle for the country’s energy independence.
Reporters say that Škoda JS also appears to be the focus of an ongoing graft investigation. The National Anti-corruption Bureau of Ukraine, or NABU, is looking into its shady offshore financial arrangements and possible, unlawful dealings with Nikolai Martynenko, a former Ukrainian member of parliament from the People’s Front party.
Khmelnitsky’s nuclear power plant, operated by Ukraine’s state-owned nuclear agency Energoatom, currently has two 1000 megawatt reactors but was intended to eventually have four. Construction began on two new reactors in the early 1980s but was stopped, due to a moratorium on the construction of new nuclear plants following the 1986 Chernobyl disaster.
Ukraine and Russia signed new agreements in 2010 to resume and complete the plant’s upgrade, but the Ukrainian government cancelled this agreement in 2015, later pursuing a deal with Korean manufacturers instead.
But locals in the Khmelnytsky Oblast city of Netishyn, where the nuclear power plant is located, say that its upgrade is a never-ending fiasco.
“These 30 years are exactly the same. Each time: then the French will build, then the Czechs, then Russia… Therefore, I do not believe in this venture,” one local resident told Ukrainian journalist Ekaterina Kraplyuk, who writes that one in seven jobs in the city are dependent on the plant.
However much the power plant’s upgrade is needed, many will question whether Gazprom-owned Škoda JS is the right company for the job.
Škoda JS declined to comment when contacted by reporters.
